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Angry Air France pilots continued their strike on Tuesday, with some 60 percent of the company's flights expected to be cancelled. The pilots have threatened to stay off the job until Friday.

Passengers faced a second day of travel disruption on Tuesday as Air France pilots extended a strike in protest at the airline's plans to expand its low-cost subsidiary.

Air France was forced to scrap 60 percent of its flights as unions estimated three quarters of pilots followed their call to strike.

Unions fear the French airline is seeking to bolster its Transavia France subsidiary, a leisure airline that flies to holiday destinations, because pilots there earn less than Air France pilots.

A pilot for the French flagship carrier earns about €75,000 ($97,000) a year on average while captains of long-haul flights can earn up to €250,000.

In a bid to soothe fears that management is seeking to expand Transavia at the cost of the higher-paid Air France pilots, the company announced the Transavia fleet will be limited to 30 planes instead of the 37 originally planned. This concession, however, will only run until 2019.

The company held talks into the night on Monday with unions that have threatened to strike until September 22 -- which would be the longest industrial action at the company since 1998.

There is "not yet" a breakthrough in the crisis but "we are continuing to negotiate," said Air France boss Frederic Gagey.

"We have made proposals. We have recognised the concerns of pilots who thought Transavia France could replace Air France in France," he added.

The plan "is of course not to replace Air France with Transavia," stressed Gagey.

The company plans to "add to the tools at Air France's disposal to attack a new market -- the leisure market -- by developing Transavia," he explained.

Gagey put the daily losses from the strike at €10 to 15 million.

Traffic 'halted'

Despite the strike, the situation at France's main airports was mainly calm as passengers were warned in advance they would be unable to travel.

Terminal 2E at the main Paris airport, Charles De Gaulle, was deserted, with only a few bewildered and stranded passengers who had not received a message in time.

"I was supposed to leave at 9:35. They finally found me a flight in the afternoon," said Delhi-bound Indian tourist Sakhit Dhamija.

The head of the Air France-KLM group, Alexandre de Juniac, told French radio the situation would "improve slightly" on Wednesday, with more than 40 percent of flights in the air.

But the airline later said that it would have to scrap 60 percent of flights on Wednesday.

At certain hubs in France, however, the situation was dire. In the southern city of Toulouse, for example, only one flight out of 43 was to run as scheduled on Tuesday.

And unions warned that the situation would deteriorate the longer the strike went on, as pilots that did fly were forced to take their legally stipulated rest period.

"Tuesday will be even more difficult and on Wednesday, Air France traffic could be halted" completely, said Jean-Louis Barber, head of the SNPL pilots' union.

Fresh negotiations between unions and the management will take place later Tuesday afternoon.

Management already rejected a call by unions to put Air France pilots at the controls of any plane with more than 100 seats, regardless of the operating company -- Transavia included.

"The answer is no, because an Air France contract costs more than a Transavia contract," said Gagey.

In neighbouring Germany, a strike planned for Tuesday by flag carrier Lufthansa was narrowly averted after pilot union Cockpit won concessions from management, days after pilots staged an eight-hour walkout over changes to early retirement rules.